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CEO Turnover Slows in June
Midyear total equals that of 2012

By SHRM Online staff  7/12/2013
 
The number of chief executive officer departures totaled 94 in June, down 9.6 percent from the 104 in May and 5 percent lower than the 99 departures in June 2012, according to the latest report on CEO turnover released July 10, 2013, by global outplacement consultancy Challenger, Gray & Christmas Inc.

June marked the end of a slightly less active quarter for CEO turnover. For the three-month period ending June 30, 292 CEO departures were announced—a 10 percent drop from the 309 departures announced in the first quarter of 2013. The second quarter total was virtually unchanged from the same period in 2012, when 288 CEO changes were reported. Challenger has tracked 601 CEO changes so far this year, which is equal to the departures recorded in the first six months of 2012.

The health care sector continues to see the heaviest turnover. It leads all other sectors, with 117 departures in 2013, including an industry-leading 24 in June. Of the 117 affected health care and medical-device companies, 74 CEO changes came from hospitals and hospital systems.

“Changes resulting from health care reform law, coupled with sequestration, which are resulting in funding cuts and lower Medicare reimbursements, could be the catalyst for leadership changes,” said John A. Challenger, chief executive officer of the firm, in a press statement.

Despite the volatile landscape in the health care sector, CEO turnover is actually down 7.8 percent from a year ago, when 127 CEO changes among health care organizations were recorded as of June.

Government and nonprofit organizations announced 21 CEO changes in June, bringing the six-month total to 78. The government/nonprofit sector has the second-highest turnover rate so far this year, followed by the financial sector, which has seen 73 CEO departures. Firms in the computer sector have witnessed 62 CEO changes in the first half of 2013, with eight in June.

Resignation continues to be the most cited reason for departures, with 23 in June and 172 for the year. It is followed by retirements at 121, 22 of which occurred in June. The number of chief executives stepping down (usually staying with the organization as chairman of the board, a director or in some executive capacity) is 111 so far this year, including 19 in June.

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